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Mitt’s Keynesian Slip: Not The First Time

Sharp readers like Jonathan Chait have seized on a telling exchange in Mark Halperin’s recent interview with Mitt Romney, in which Romney blatantly undercuts the anti-Keynesian line that he and other Republicans have been pushing for the past couple years.

Halperin: You have a plan, as you said, over a number of years, to reduce spending dramatically. Why not in the first year, if you’re elected—why not in 2013, go all the way and propose the kind of budget with spending restraints, that you’d like to see after four years in office? Why not do it more quickly?
Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression.  So I’m not going to do that, of course.

Chait notes, bemusedly, that this deviation from orthodoxy has provoked no outrage on the right, which to him is further proof of just how cynical the Republican anti-Keynesian stance really is: 

Of course. Romney says this as if it’s completely obvious that reducing the deficit in the short term would throw the economy back into recession, even though he and his party have been arguing the opposite case with hysterical fervor. Republicans have committed themselves to Austrian economic notions and other hoary doctrines justifying the position that reducing deficits is a helpful way out of a liquidity trap.
I’ve thought that this represents primarily a case of self-delusion in the cause of political self-interest, as opposed to conscious cynicism: Republicans understood that bigger deficits would spur faster growth and reduce their chances of regaining power, so they found themselves more persuaded by theories suggesting bigger deficits wouldn’t really help. But if they had really converted to this belief, wouldn’t there be even a tiny bit of wailing about Romney’s open endorsement of Keynesianism? It’s not as if conservatives have been shy about holding his feet to the fire when he expresses some tiny deviation from their position. Yet I have noticed zero conservative complaints about Romney’s big fat wet kiss to John Maynard Keynes, which suggests their level of actual devotion to this position borders on nil.

To this, I would just add that this is not the first time that Romney has flirted with common-sense Keynesianism. On the campaign trail in Michigan in February, he had this to say: “If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy. So you have to, at the same time, create pro-growth tax policies.” At the time, I declared this line the classic Romneyesque gaffe—one that is substantively upsetting to people on the left and right simultaneously, much as his line about “not being concerned about the very poor” was.

That is, it would be substantively upsetting to people on the right if they actually held firmly the anti-Keynesian orthodoxy that Romney’s remarks violated—or if they believed that he believed what he was saying. Given that Romney today is back to attacking the 2009 stimulus plan as his central campaign theme of the day, one can excuse even true believers in anti-Keynesian orthodoxy for not being entirely sure whether Romney is with them or not.

follow me on Twitter @AlecMacGillis